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At the end of last year the government announced that they were going to cut red tape for employers by simplifying the reporting obligations for tax and superannuation through Single Touch Payroll™.

That’s great, isn’t it? There is too much red tape for businesses; anything that cuts that red tape surely must be good?

Let’s see how Single Touch Payroll™ will help you!

Firstly, you will be required to report payroll and superannuation information to the ATO when employees are paid through SBR-enabled software. This means that you will have to obtain online payroll software that complies with the government’s requirement to transmit the details of each pay run immediately to the ATO. This will save you the red tape of reporting PAYG withheld on your monthly or quarterly BAS or IAS, and do away with the need to issue Payment Summaries.

Secondly, when you take on a new employee Single Touch Payroll™ will streamline the making and reporting of Tax File Number declaration and Super Choice form. When an employee leaves Single Touch Payroll™ will cut red tape by notifying government agencies, such as the Department of Human Services.

Thirdly, as Single Touch Payroll™ will notify the ATO of the required superannuation contributions, it will cut red tape by helping the ATO detect in real time where you may have paid the superannuation later than 28 days after the end of the quarter or made contributions to a different fund to the one chosen by your employee.

There is no doubt that Single Touch Payroll™ has the potential to save huge amounts of red tape for the ATO – but I am not at all sure that the benefits are going to be evenly spread among small business owners.

Single Touch Payroll™ is compulsory – you will have to obtain payroll software that complies with the ATO requirements. If you currently manage your payroll using a manual system you will have to get computerised. The discussion paper airily states: “it is expected that some basic, entry-level software packages will be available free of charge; this will help businesses that do not currently use software transition into an electronic business model without software costs.” You will still have to pay for computer equipment and training to comply with Single Touch Payroll™.

What a Brave New World we live in that has a Big Brother like the ATO to help us with our business administration!